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Bain Capital has increased its bet on Britain’s housing market by buying an independent builders’ merchants for around £200m.

David Kilburn, co-founder of Hull-based MKM Building Supplies, will retain a significant stake and remain with the business. Joint owners 3i will collect around £70m and LDC £20m. The 45 store managers, who have a small stake in their branch, will have a significant payday.

The US private equity group already owns a stake in Ibstock, the brick maker, and Ideal Standard, a Belgium-based bathroom products manufacturer.

Since 3i invested in MKM in 2006, revenues and profits have more than trebled. It has 47 branches across the country and has grown like-for-like sales by about 12 per cent year on year since 2011. It has £284m revenue and made underlying earnings before interest, tax, depreciation and amortisation of £22.4m last year. It employs more than 1,100 people with branch managers having authority to run their own price promotions and ordering strategy.

But with just 2 per cent of a builders’ merchants market Bain believes there is room for further expansion. The market remains fragmented with national chains controlling 55 per cent. Competitors including Travis Perkins and Wolseley have been closing branches and shedding jobs.